Diabetic nephropathy (DN) is the leading cause of end-stage renal disease (ESRD) in the United States. Intensive control of hyperglycemia and hypertension has been shown to slow its progression to ESRD, however, ultimately renal failure still ensures in approximately 20% of patients. Recently, a new class of antidiabetic drugs, the thiazolidinediones (TZDs), which specifically bind to and activate a nuclear receptor designated peroxisome proliferator-activated receptor gamma (PPARgamma), have been found not only improve blood glucose level but also to slow the progression of DN in type II diabetes. Accumulating evidence suggests that the favorable renal effects of TZDs may be a result of direct activation of intra-renal PPARgamma. Recent studies in type I diabetic and non-diabetic glomerulosclerotic rats shows that PPARy activators unexpectedly slow the progression of glomerular fibrosis. These data strongly suggest PPARgamma ligands can protect glomerular structure and function independent of their capacity to improve glucose tolerance. The present proposal will further define the role of renal glomerular PPAR), as a potential therapeutic target in pathogenesis of diabetic renal involvement. To achieve these aims we propose to: 1) Utilize mice with a "floxed" PPARgamma allelel to determine whether of post-natal PPAR'y gene disruption exacerbates the progression of nephropathy in type I diabetes and type II diabetes. 2) Define the effect of restricted deletion and activation of PPARgamma in the glomerular podocyte on progression of DN in type I and type II diabetic mice, and 3) Determine whether PPARgamma activation suppresses the TGFbeta (TGFbeta) signaling thereby contributing to the beneficial renal effects of glomerular PPARgamma activation in diabetes. Not only will these studies explore TGFbeta expression and signaling through Smad transcription factors, but also the effect of conditional deletion of the TGFbeta receptor II gene deficiency on the progression of DN will be studied using a novel LoxP flanked TGFBeta type II receptor. These studies will not only provide important information about the role of PPARgamma in the normal kidney but also determine whether selective targeting of this receptor in the kidney could provide a novel theapeutic target in diabetic nephropathy.